An Application of Ordered Weighted Averaging Operators to Customer Classification in Hotels

Abstract

An algorithm widely used in hotel companies for demand analysis is the so-called K-means. The aforementioned algorithm is based on the use of the Euclidean distance as a dissimilarity measure and this fact can cause a main handicap. Concretely, the Euclidean distance provides a global difference measure between the values of the descriptive variables that can blur the relative differences in each component separately and, hence, the cluster algorithm can assign a custom to an incorrect cluster. In order to avoid this drawback, this paper proposes an application of the use of Ordered Weighted Averaging (OWA) operators and an OWA-based K-means for clustering customers staying at a real five-star hotel, located in a mature sun-and-beach area, according to their propensity to spend. It must be pointed out that OWA-based distance calculates relative distances and it is sensitive to the differences in each component separately. All experiments show that the use of the OWA operator improves the performance of the classical K-means up to 21.6% and reduces the number of convergence iterations up to 48.46%. Such an improvement has been tested through a ground truth, designed by the marketing department of the firm, which states the cluster to which each tourist belongs. Moreover, the customer classification is achieved regardless of the season in which the customer stays at the hotel. All these facts confirm that the OWA-based K-means could be used as an appropriate tool for classifying tourists in purely exploratory and predictive stages. Furthermore, the new methodology can be implemented without requiring radical changes in the implementation of the classical methodology and in data processing which is crucial so that it can be incorporated into the control panel of a real hotel without additional implementation costs.